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Mr. Jackson : There is no reason to suppose that a working class 18- year-old will be deterred from entering higher education by the introduction of a loan. If he is bright enough to enter higher education, he will be bright enough to see the benefits that will accrue to him not only in educational terms--the hon. Member for Derbyshire North-East (Mr. Barnes) was right about that--but in terms of future income. Such students will see that student loans will add to the resources available to support them while they are studying and they will recognise that it will be a risk -free investment, because they will not be obliged to repay after graduation if they cannot do so. As my hon. Friend the Member for Eastwood observed, it is

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extraordinary to argue that any price higher than zero will deter someone from higher education. Either that grossly undervalues higher education, or it grossly underestimates the intelligence of younger people.

Mr. Pike rose--

Mr. Jackson : Student attitudes to loans were evoked by the hon. Member for Oxford, East. In common with other Conservative Members, I think it a bit of a joke for the National Union of Students to use taxpayers' money to ask students whether they would prefer a free gift to a repayable loan. The union did not need to invest taxpayers' money in that inquiry to derive the answers that it was seeking. The real question is what students are doing, not what students are saying in reply to politically motivated surveys.

As has been pointed out, this was the first year of recruitment of young people who knew that the Government planned to introduce student loans in their second year, and my hon. Friend the Member for Wyre Forest actually understated the effects. This year the evidence available suggests there has been a 5 per cent. increase in recruitment to universities, a 13 per cent. increase in full-time students going to polytechnics and a 10 per cent. increase in the number of part-time students going to them. Those facts shed light on the false proposition that young people will not enter higher education if there are to be loans.

Mr. Andrew Smith rose --

Mr. Jackson : I do not have much time.

I want to say a word about the argument that the scheme is a subsidy to the rich, which was advanced by the hon. Members for Blackburn and for Antrim, North and, in the last debate, by my hon. Friend the Member for Chichester (Mr. Nelson). No doubt my predecessors shared my experience of dealing every week with letters about young people whose parents refuse to fill in the forms to assess their income and hence their parental contribution. Surveys have shown that 41 per cent. of parents do not pay their full assessed parental contribution, so I must tell hon. Members who think that our loans will be a subsidy for the rich that I listened to their arguments with some bitterness, because I know that many will find that the loans enable them to take part in higher education when their parents refuse to support them.

The hon. Member for Sheffield, Hillsborough (Mr. Flannery) referred to social justice and equity. In our analysis in the White Paper, we explained how the return to the taxpayer in terms of an economic investment in higher education could be compared with the returns to the individual graduate. As my hon. Friend the Member for Epping Forest (Mr. Norris) argued, there is no doubt that graduate earning power is greatly enhanced by the experience of higher education. At present, the graduate makes no financial contribution and the taxpayer has to pay for the whole of that education. As my hon. Friend the Member for Lewisham, West (Mr. Maples) argued, one quarter of all taxpayers are on incomes below the national average and the difference between their incomes and those that graduates can expect is considerable. From the point of view of equity in public expenditure, student

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grants are a system of taking money from the less well off and giving it to the better off. I wonder about the equity and social justice of that position.

A number of speakers, especially my hon. Friend the Member for Bury, North, referred to the disabled. I have had several meetings with representatives of groups for the disabled. I have listened carefully--and we shall continue to listen carefully--to what is said. I emphasise that the student loan will be additional for disabled students and that there will be no disentitlement to benefits. In addition, disabled graduates will be able to benefit from the ability to defer repayment if their income is below a certain level. We have made it clear that we are prepared to review the arrangements in relation to grant support and we shall monitor the effects of student loans on disabled students. If the legislation is passed, as the Government propose, we shall have the flexibility to respond to the results of that monitoring by amending the regulations. If we put such provisions in the primary legislation, as the Opposition wish us to do, we should probably not be able to respond for many years. The Government have carried out two surveys which provide information about student use of supplementary benefit and housing benefit. From those surveys, we know that as many as 40 per cent. of all students do not claim any benefit. We also know that the average claim amounts to about £315 per year per student claimant, which means that a top-up loan of £420 would be not only a complete addition to the resources of the 40 per cent. who claim no benefit, but a substantial addition to the resources of most of the rest. There will also be the access funds for those who are out of pocket. I note what has been said on several occasions by my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) and we shall review the question of the access funds to take care of any genuine difficulties. I emphasise that we intend to continue to monitor and to survey the picture. If we have the means to do so--and if the Opposition will allow us to do so--we shall be able to take action through the regulation-making power in the Bill.

Several hon. Members have raised the question of the cost of not having loans. The Opposition have tried to make much of the simple, natural, logical fact that with loans there is a period when one pays out before money comes back. We have to compare the cost of our proposal with the cost of the Opposition's alternative, about which they have been coy. We were told that they would increase the grant "when resources allowed". Resources do allow, and the Government are making that provision now in the form of the student loan. If the Opposition simply replaced our proposed loan with a grant--that is, a grant with a 100 per cent. take-up instead of a loan with an 80 per cent. take-up--and if they kept social security and housing benefit entitlements, their scheme would be more costly than our scheme from year one. Our scheme will yield savings compared with their proposals from year one. I noted that my hon. Friend the Member for Lewisham, West calculated that by the beginning of the next century it stacked up into a difference of hundreds of millions of pounds in the costs of the schemes.

The burden of repayment will not be all that heavy. For the average course, it will be about £400 per year. which compares with the cost of a ski- ing holiday--and about 1

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million people from Britain went on ski-ing holidays last year. [Interruption.] My predecessor made a distinguished speech on these issues. When he visited Sweden--

Question put, That the Bill be now read a Second time : The House divided : Ayes 301, Noes 220.

Division No. 8] [10 pm

AYES

Adley, Robert

Aitken, Jonathan

Alexander, Richard

Alison, Rt Hon Michael

Allason, Rupert

Amery, Rt Hon Julian

Amess, David

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Tom (Hazel Grove)

Ashby, David

Aspinwall, Jack

Atkins, Robert

Baker, Nicholas (Dorset N)

Baldry, Tony

Batiste, Spencer

Bellingham, Henry

Bendall, Vivian

Bennett, Nicholas (Pembroke)

Bevan, David Gilroy

Biffen, Rt Hon John

Blaker, Rt Hon Sir Peter

Body, Sir Richard

Bonsor, Sir Nicholas

Boscawen, Hon Robert

Boswell, Tim

Bottomley, Peter

Bottomley, Mrs Virginia

Bowden, Gerald (Dulwich)

Boyson, Rt Hon Dr Sir Rhodes

Braine, Rt Hon Sir Bernard

Brandon-Bravo, Martin

Brazier, Julian

Bright, Graham

Brown, Michael (Brigg & Cl't's)

Browne, John (Winchester)

Bruce, Ian (Dorset South)

Buck, Sir Antony

Budgen, Nicholas

Burns, Simon

Burt, Alistair

Butcher, John

Butler, Chris

Butterfill, John

Carlisle, John, (Luton N)

Carlisle, Kenneth (Lincoln)

Carrington, Matthew

Carttiss, Michael

Cash, William

Channon, Rt Hon Paul

Chapman, Sydney

Chope, Christopher

Churchill, Mr

Clark, Hon Alan (Plym'th S'n)

Clark, Dr Michael (Rochford)

Clark, Sir W. (Croydon S)

Clarke, Rt Hon K. (Rushcliffe)

Colvin, Michael

Conway, Derek

Coombs, Anthony (Wyre F'rest)

Coombs, Simon (Swindon)

Couchman, James

Cran, James

Currie, Mrs Edwina

Curry, David

Davies, Q. (Stamf'd & Spald'g)

Davis, David (Boothferry)

Day, Stephen

Devlin, Tim

Douglas-Hamilton, Lord James

Dunn, Bob

Durant, Tony

Dykes, Hugh

Eggar, Tim

Evans, David (Welwyn Hatf'd)

Evennett, David

Fallon, Michael

Field, Barry (Isle of Wight)

Fishburn, John Dudley

Fookes, Dame Janet

Forman, Nigel

Forsyth, Michael (Stirling)

Forth, Eric

Fowler, Rt Hon Norman

Fox, Sir Marcus

Franks, Cecil

Freeman, Roger

French, Douglas

Gale, Roger

Gardiner, George

Garel-Jones, Tristan

Gill, Christopher

Gilmour, Rt Hon Sir Ian

Goodson-Wickes, Dr Charles

Gorman, Mrs Teresa

Gorst, John

Gow, Ian

Grant, Sir Anthony (CambsSW)

Greenway, Harry (Ealing N)

Greenway, John (Ryedale)

Gregory, Conal

Griffiths, Peter (Portsmouth N)

Grist, Ian

Ground, Patrick

Grylls, Michael

Hague, William

Hamilton, Hon Archie (Epsom)

Hamilton, Neil (Tatton)

Hampson, Dr Keith

Hanley, Jeremy

Hannam, John

Hargreaves, A. (B'ham H'll Gr')

Hargreaves, Ken (Hyndburn)

Harris, David

Hayhoe, Rt Hon Sir Barney

Hayward, Robert

Heathcoat-Amory, David

Heddle, John

Hicks, Mrs Maureen (Wolv' NE)

Higgins, Rt Hon Terence L.

Hind, Kenneth

Hogg, Hon Douglas (Gr'th'm)

Holt, Richard

Hordern, Sir Peter

Howard, Michael

Howarth, Alan (Strat'd-on-A)

Howarth, G. (Cannock & B'wd)

Howe, Rt Hon Sir Geoffrey

Howell, Rt Hon David (G'dford)

Hughes, Robert G. (Harrow W)

Hunt, David (Wirral W)

Hunter, Andrew

Hurd, Rt Hon Douglas

Irvine, Michael

Irving, Charles

Jack, Michael

Jackson, Robert

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